‘Solid operating performance’ spurs General Dynamics’ quarter

General Dynamics CEO Jay Johnson credits increased efficiency, improved productivity and reduced costs for solid performance in the company’s third-quarter numbers.

General Dynamics Corp. recorded $665 million in earnings from continuing operations in the third quarter 2011 compared to $649 million for the third quarter of 2010, a 2.5 percent increase, according to the company’s quarterly report released Oct. 26.

Operating earnings reached $998 million, an increase of 3.3 percent over third-quarter 2010 operating earnings of $966 million.

Net earnings for the quarter were $652 million, compared to $650 million in the year-ago period, for a 0.3 percent increase.

Revenues fell slightly to $7.9 billion compared to $8 billion for the third quarter 2010, a 2 percent decline.

Companywide operating margins in the quarter grew to 12.7 percent, an increase of 60 basis points over third-quarter 2010, driven by improvement in the Information Systems and Technology and Marine Systems groups, the company said.

"General Dynamics continued to execute effectively in the third quarter," said Jay Johnson, chairman and chief executive officer, in the statement.

"This solid operating performance reflects our ongoing focus on increasing efficiency, improving productivity and driving cost out of our businesses. Importantly, order activity in the quarter underscored the enduring nature of customer demand for our products and services," Johnson said.

Funded backlog grew in three of the company's four business groups -- Aerospace, Marine Systems and Combat Systems -- increasing 3.7 percent to $45.9 billion in the third quarter 2011. Total backlog, including funded and unfunded orders, grew 2.5 percent to $58.5 billion.

In addition to the total backlog, the company's estimated potential contract value grew 28.7 percent over the end of the second quarter, largely on the strength of a $5.7 billion increase in the Information Systems and Technology group.

The figures are based on management's estimate of the ultimate value of unfunded indefinite delivery, indefinite quantity contracts and unexercised options, the statement said.

Net cash from third-quarter operating activities totaled $136 million, and $1.2 billion year-to-date.

General Dynamics Corp., of Falls Church, Va., ranks No. 5 on Washington Technology’s 2011 Top 100 list of the largest federal government contractors.